A Parliamentary Committee on Thursday recommended a slew of measures favouring property buyers, which include a three-year jail term or a fine for a defaulting builder under a new law which will now cover projects of 500 sqm or eight flats.

The Select Committee of Rajya Sabha, which examined the Real Estate Bill 2013 and submitted its report in the House on Thursday, also recommended that 50 per cent of payments made by homebuyers for a real estate project should be kept in a separate account and used for that specific purpose only while the rest can be spent on other projects.

The Bill aims at establishing the Real Estate Regulatory Authority (RERA) for regulation and promotion of the sector and setting up of an adjudicating mechanism for speedy dispute redressal. It also aims at establishing the appellate tribunal to hear appeals against the decisions of the RERA.

Under the proposed new law, a jail term of up to three years or a penalty of up to 10 per cent of project cost or both can be imposed on a builder in case of defaulting on commitments made to a buyer.

The committee also recommended that the new law should cover projects of 500 sqm and more or eight flats, instead of 1000 sqm or 12 flats as proposed initially in the bill.

The panel recommended that promoters should get their accounts audited within six months after the close of every financial year by a practising chartered accountant.

It was also of the view that real estate development beyond town planning area may be brought under the ambit of the Bill.

The committee, however, did not agree that a person holding more than two apartments or plots in the same project should be treated as a promoter.

It said that a promoter, while applying for registration of any project with the authority, should enclose details of its existing projects, details of approvals, land title and payment dues.

The panel also redefined the carpet area, saying it means the net usable floor area of an apartment, excluding the area covered by the external walls and that under service shafts, exclusive balcony or verandah and open terrace areas, although it would include the area covered by the internal partition walls of the apartment.